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You are required by law to prepare and file your tax return every year. Contrary to the popular belief, preparing taxes is a straight forward process for vast majority of tax payers with simple tax return. You need to add income from all sources to get gross income and deduct all allowable tax deductions to figure out taxable income. Then find your taxes before credits from tax tables. Now you can subtract eligible tax credits to get your final tax. If you paid more taxes through payroll deductions, estimated taxes,etc then you the difference is your tax refund. Otherwise, the difference is your tax liability and you need to send a check to IRS along with the tax return.
If you prepare your own tax return, you need to know all applicable tax laws and apply them while calculating the taxes and filling tax return. It is advisable to review tax law changes every year, as lawmakers add new ones and change existing ones. Changes in the personal life situation like marriage, new home, new baby, etc. will also affect your taxes.
Some people may have unique tax situation and the tax preparation process may become complicated. There are many options available and you can choose the one depending on your level of expertise.
Tax Software
If you are some knowledge about the tax rules, and your taxes are not very complicated, then you can use one of the tax software. Tax Software is available in varying complexity and sophistication. A cheap software may not save you any money if it fails to identify a valuable tax deduction. On the other hand, you don't need a costly top of the line tax software to prepare a simple tax return. Always read tax software reviews and product features before selecting one.
Online or Desktop Tax Software
There are many tax software available online and you can use them free of charge until you decide to file or print your completed tax return. You can access it from anywhere using a standard web browser. No need to install any software or worry about the compatibility issues with your operating system, etc. The tax software vendors keep their software up to date and you don't have to worry about checking for updates every time you run the software. There are more online tax software providers and hence cost of software is generally less than desktop versions. You need to buy desktop tax software before you can try it. So we strongly advice to use one of the online tax software.
Free Online Tax Software
There are many online tax software providers offering free tax preparation and e-filing as part of free file alliance with IRS. Some of them have limits on income, age or even software limitation for free filers. TaxACT offers FREE Tax Preparation and FREE e-filing out any limitations on their software features or any special qualification for the taxpayers.
Tax Professional
If you have a complex tax return or you are not have enough tax knowledge to prepare your own taxes, then it is advice able to seek help of a tax professional like a certified public accountant, an enrolled agent, or a tax attorney. You need to select the best tax professional suitable for tax needs. If you need to prepare your tax return and does not require any long term relationship, you could approach one of the retail tax service chains like H&R Block, Liberty Tax Service, or even a local independent tax service firm. If you need additional services like tax planning, it may be better to approach a certified public accountant or tax attorney in your area. They charge more than retail tax service firms, but the service you receive will be worth the money. If you get into IRS tax problem then you need help of a tax attorney
Free Professional Tax Help
IRS is operating a free tax preparation program called VITA (Volunteer Income Tax Assistance). It is primarily for individuals with low income and is run by volunteers. AARP also have tax preparation program for senior citizens.
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